Hugo Chávez: no more bank takeovers on the cards

Banco Federal, which was taken over by the Venezuelan government last Monday, is owned by Nelson Mezerhane, a Chávez opponent. Photograph: Carlos Garcia Rawlins/Reuters

The president of Venezuela, Hugo Chávez, said today he had no plans to take over more banks, and urged people not to withdraw their deposits.

Chávez sought to calm nervousness about banks less than a week after the government seized control of Banco Federal, the country's eighth largest bank.

He said there was no reason for anyone to "run to the bank to take out money, scared that Chávez is going to finish off the banks, no".

"I don't have plans to intervene in any bank," Chávez said, adding that regulators seized control of Banco Federal to protect clients because the bank was broke.

The bank's owner, Nelson Mezerhane, a Chávez opponent, has denied that and said the bank takeover was politically motivated.

Earlier yesterday, Venezuela's vice-president, Elias Jaua, denounced what he called a campaign of rumours, particularly on the internet, by government opponents whom he accused of seeking to set off panicked withdrawals and create a banking crisis.

Jaua, who was accompanied by leaders of the private banking sector, said the country's financial system was in solid shape.

In the past seven months, the government has seized control of about a dozen small banks, in many cases saying it was necessary due to financial problems at the institutions.

Those takeovers, combined with the nationalisation of the country's third-largest bank last year, have put about 30% of the banking sector under government control.